Avenue Supermarts, the company behind the popular Indian retail chain DMart, witnessed a revision in its stock outlook. Jefferies, a global investment firm, adjusted the price target for Avenue Supermarts (DMART: IN) to INR4,400 from the previous INR4,600.
Despite this change, the firm maintained its Hold rating on the stock.
The price target revision comes in the wake of DMart reporting its slowest like-for-like (LFL) growth in several quarters. According to Jefferies, part of this slowdown can be attributed to increased online competition.
Furthermore, the company's revenue growth has decelerated to the low teens, with EBITDA growth trailing even further behind due to rising staff costs and other overheads, leading to earnings that fell short of both Jefferies' and the consensus estimates.
The retail chain's product mix remained consistent, yet the number of new store openings was noted to be disappointing. While DMart's online segment, known as DMart Ready, exhibited a 22% growth, this was considered lackluster when juxtaposed with the performance of its quick commerce (QC) counterparts.
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